Hundreds of UK hospitality businesses, supported by celebrity chefs such as Angela Hartnett and Heston Blumenthal, have called on Prime Minister Andy Burnham to outline his plans for lowering VAT in the sector. They are urging him to fulfil a previous commitment.
Over 800 businesses have sent an open letter to the Prime Minister as part of the #VATsTheProblem campaign. The letter warns that without a “fairer tax burden for hospitality”, the industry faces more closures, job losses, and fewer opportunities for young people.
Signatories include major pub, bar, and brewer groups like Fuller’s, Greene King, Mitchell’s & Butlers, and Wetherspoons, alongside restaurant chains such as Franco Manca, Pizza Express, and Wagamama. Hotel chains including Best Western Hotels and Marriott International, as well as leisure groups Center Parcs and Parkdean Resorts, have also signed. The majority of signatories are small and medium-sized businesses, including independent pubs and hotels.
In February, when he was Mayor of Greater Manchester, Burnham publicly stated he would advocate for a hospitality VAT rate consistent with European levels, citing the social value businesses bring to communities. The #VATsTheProblem petition, which calls for a 10% VAT rate for hospitality to align the UK with the European average, has gathered over 370,000 signatures.
The campaign follows the Prime Minister's announcement in his first week in office of a 20% cut in business rates for pubs, clubs, and live music venues, part of a £100m aid package. However, this move immediately led to calls for further action from Burnham.
The letter states that a lower VAT rate for hospitality could transform closures into openings, lost jobs into new jobs, and revitalise high streets. Chef Tom Kerridge added that the 20% VAT rate is hindering hospitality, particularly because labour is a significant cost for the sector, and VAT cannot be reclaimed on personnel expenses.
Separately, the government has announced it will collaborate with publicans to offer more options for pub tenants seeking greater freedom in managing their establishments. This follows a review of the 2016 pubs code, aiming for fairer lease agreements and better beer prices. Other potential changes include allowing longer-term relationships between pub companies and tenants.